So What!?

We have all heard, since the early 1970’s, that familiar liberal attempt to make us all feel guilty for driving our cars, heating our homes, turning on lights to read, watching television, or participating in any activity which uses energy or energy byproducts in our daily lives. The U.S. only produces x percentage of the world’s oil, but manages to consume y percentage. We are led to believe, either through the usage of crying caricatures of Native Americans, inaccurate disproportionate maps, or unnwatchable Hollywood bilge such as, “Avatar,” or, “Dune,” that somehow this resource is a zero sum endeavor, and that we hear in the United States are in fact stealing the precious life blood of some distant unknown land. Many of my smarter compatriots on the right have taken up the sport of pointing out the total baloney in the arguments being put forward, and I admit that it has been great fun to read this commentary. I wish to take a different approach.

So what? Let’s assume for just one moment that everything Barack Obama has said on the subject of oil production and oil prices are true. I realize that this acceptance of fantasy is harder for people with any sings of intelligence, but just pretend you’re reading a Tolkien or Lewis novel or something like that. Fairies and Orcs are real, so why wouldn’t it be possible for President Obama to be telling the truth? So what? Even if we produced not one single drop of oil domestically, why does that lend any credence to the argument that we should somehow be prohibited from its usage? The purchase of oil is not a wealth transfer, it is a wealth exchange. For those who do not fully understand the distinction, let me explain it to you.

We buy oil in this country and we use it, rather than let it sit on a shelf somewhere. Farmers use it in their machinery to make food grow on their farms, which is then used to not only feed us here in America, but pretty much the rest of the world as well. Glad uses oil to make sandwich bags so that people all across America can pack lunches if they so choose rather than blowing their entire disposable income on restaurants during their work week. They also make garbage bags so that environmentalists will be happy when we no longer take our refuse and throw it where ever we see fit. Doctors, operating on patients will use energy for lighting so that they can see where to cut, plastics exist all over that operating room, and the sterilization process uses extreme heat, and then air conditioning to keep the operating room at a constant non bacteria breeding ground temperature. As this could go on for days, I believe every one should get the point by now, so what?

Now let’s take a look at the argument that it will take x number of years for new production and sources to come on line anyhow. So what? Nobody in the known universe is suggesting or even attempting to suggest that our need for affordable energy is a short term proposition. We have all heard the arguments that our manufacturing base has been fleeing the country. Let me let you in on a well kept secret. The manufacturing of the entire globe will follow where the cheap affordable energy, and to a lesser extent, the cheap affordable labor are. As long as we have oil here in America, and we are willing to allow the free markets to provide that oil to those who want it, we will continue to have a manufacturing base. Our base started to flee, not coincidentally, the very same day that our elected leaders thought it would be a good idea to meddle in those markets. 5,10,15,20,and 30 years from now, we will look back on today and say, “gee, I wish we had had the foresight to drill for more oil x number of years ago.” So even if Barack Obama’s asinine predictions, based on nothing real by the way, about how long it would take to get oil from a new source to market, so what?

While we’re at it, let’s talk about the concept of, we already are drilling, and are drilling more than we ever have. So what? Our population is growing by about 150,000 people per month. It stands to reason that more of us will use more resources to create more stuff. Assuming that this is true, (remember that we are still operating in the Obama bizarro universe here,) this is still a poor reason not to allow anyone who finds it economically advantageous to drill, to drill. The beauty of the free market system is that when production is actually too high, the price signals of economic loss will tell those drilling when to stop. People who lose money on an endeavor, will soon stop. People who make money on an endeavor will continue, and find ways to do more of it. The profits that big oil, or little oil for that matter, are able to turn, represent nothing more than the measure by which they were able to benefit their fellow man. When you buy a gallon of gasoline at what ever price per gallon that you pay, it is because at that moment in time, you would rather have the gasoline than the money. Conversely, when gas prices climb too high, people make the conscience decision to drive less. the fact that oil companies are able to produce such large profits, is a good thing. This means that society as a whole, has determined that their product is very important and useful to the rest of us. So, for those who inexplicably feel as though the President’s assessment as to our current oil production is accurate, so what?

Alternative forms of energy, known as, “green energy,” are the future of the world and America is another of his favorite talking points. Never mind that belief in this necessitates a complete misunderstanding of economics and reality, let’s assume, since we have already agreed to do so, that it is all true. So what? when I decide to travel the 3 hours to Pittsburgh to watch my favorite Hockey Team play in the Stanley Cup Playoffs this year, I will purchase sufficient energy to put me in a 3000 pound piece of American machinery and travel the 180 miles at an average speed of 65 miles per hour. I will then, after watching what hopefully will be a great game, travel the same distance home again. My cares for this energy are that it will be a) reliable, b) convenient, and c) affordable. I want to actually have a reasonable assurance that I will make it there and back, that I will be able to utilize the energy when it is convenient for me to do so without hours of preparation ahead of time, and that it will cost me personally a price that I feel is worth it to pay for such an endeavor. Do I ultimately care what the source of that energy is? Most Americans do not, and for those who do, they are free to put that into their equations. Alternative sources, without the government’s meddling into the market place, would cost much more. Since this is a free country, those people who care are free to pay that price. When those alternative sources become more efficient to utilize than current sources, I will be the first to use them. Even before the Obama Administration began its war on energy, BP was the leading researcher into wind and solar power. They are in the business of providing us with our energy needs, and from their perspective, they are selling us the ability to travel 180 miles in 3 hours for about $20. Ultimately, their decision as to what the end product will be depends upon their ability to bring it to market in sufficient quantities as to satisfy those three conditions that I mentioned earlier. Even if we witnessed today, the full splendor of the green fairy, and we were fully capable of satisfying our energy needs through the wind and the sun, the free market system would still be best suited to tell us when oil production was not longer needed, and when it would be a good time to stop producing it. So, even if the President’s assumptions about how soon we would be able to replace fossil fuels as our primary source of energy, so what?

Now, since I am a jazz fan, and since the Miles Davis tune bears the same name as my posting, please enjoy Miles Davis and John Coltrane performing, “So What.”

Comments

Comments and respectful debate are both welcome and encouraged.

Comments are the sole opinion of the comment writer, just as each thread posted is the sole opinion or post idea of the administrator that posted it or of the readers that have written guest posts for the Blogmocracy.

Obscene, abusive, or annoying remarks may be deleted or moved to spam for admin review, but the fact that particular comments remain on the site in no way constitutes an endorsement of their content by any other commenter or the admins of this Blogmocracy.

We're not easily offended and don't want people to think they have to walk on eggshells around here (like at another place that shall remain nameless) but of course, there is a limit to everything.

With the East Coast poised to lose 50 percent of its oil refining capacity, three members of Congress on Monday worried that while the country is producing more of its own crude oil, it might grow more dependent on other countries for gasoline and diesel fuel.

related
Lawmakers worry about East Coast refining capacity
With the East Coast poised to lose 50 percent of its oil refining capacity, three members of Congress on Monday worried that while the country is producing more of its own crude oil, it might grow more dependent on other countries for gasoline and diesel fuel.
(gee, ya think?)

OK, so what the article didn’t say is, why the fuck those refineries are closing? It did say that ConocPhilips idled a 185,000bpd refinery while seeking a buyer, but didn’t say why they were trying to sell it. What the fuck is up with that shit?

related
Lawmakers worry about East Coast refining capacity
With the East Coast poised to lose 50 percent of its oil refining capacity, three members of Congress on Monday worried that while the country is producing more of its own crude oil, it might grow more dependent on other countries for gasoline and diesel fuel.
(gee, ya think?)

OK, so what the article didn’t say is, why the fuck those refineries are closing? It did say that ConocPhilips idled a 185,000bpd refinery while seeking a buyer, but didn’t say why they were trying to sell it. What the fuck is up with that shit?

WASHINGTON, March 22, 2012 – Citing an analysis by energy consulting firm Baker and O’Brien, API’s Group Director for Downstream and Industry Operations Bob Greco told reporters this afternoon that EPA’s rulemaking on Tier III could substantially increase the cost of making gasoline without any proven environmental benefits:

“A new analysis for API by Baker and O’Brien shows a Tier III rule reducing sulfur … would increase the per gallon cost of manufacturing gasoline by between six and nine cents. Including a vapor pressure reduction, which EPA considered, could increase the costs of manufacturing by as much as 25 cents per gallon. With the pump price of gasoline already above $4 a gallon in some parts of the country, this added burden clearly makes Tier III the wrong regulation at the wrong time.

“More importantly, EPA has yet to demonstrate any air quality benefits from reducing sulfur in the amount proposed. And, as the Baker and O’Brien analysis also shows, implementing the new requirements would increase greenhouse gas emissions because of the use of energy-intensive hydrotreating equipment to remove sulfur from the gasoline.

“We urge the administration to take a step back on Tier III and its other proposed rules. We must be sure that new regulatory proposals are necessary, properly crafted, practical, and fair to allow US refiners to remain competitive, preserve good paying refinery jobs, and ensure our energy security.”

not being in the fuel industry, and having had MikeC and HucknoFunn beat me like a redheaded step child for my ignorance more than once, while I suspected that might be the case I opted for caution and asked, rather than look foolish… yet again…

I ask those far more knowledgeable on the OIL industry than to correct anything wrong in the following…. I heard that “proven reserves” only refers to oil that we know is there due to the fact that there is a producing well there. Thus, the greenie weenies ability to get drilling blocked at damn near every turn contributes to the “we hae 2% of the worlds proven reserves, but use 20%” meme. And I read that North Americais actually the 500 pound gorilla in the room when it comes to true energy reserves.

About 20 years ago it seemed to me that we deliberately Aattempting to use the oil from those shithole countries first, preserving our own for the future. Of course, we didn’t have a stinking Marxist in chief back then either.

My cares for this energy are that it will be a) reliable, b) convenient, and c) affordable. I want to actually have a reasonable assurance that I will make it there and back, that I will be able to utilize the energy when it is convenient for me to do so without hours of preparation ahead of time, and that it will cost me personally a price that I feel is worth it to pay for such an endeavor. Do I ultimately care what the source of that energy is? Most Americans do not, and for those who do, they are free to put that into their equations.

.
That’s exactly right. I didn’t buy a Toyota Tundra Crew Max 4×4 in order to save the planet. I bought it to get me from here to there in comfort, style and with a certain level of performance.

Heh. That happened to me one other time and I thought someone was jackin with me. Thanks for ‘splainin that.

Meh… you know Rodan… His first response is always to release the Kracken, hell just the other day he went to release the Kracken, and nothing happened, Rodan was looking very confused so I had to explain to him that he had already released the Kracken.

Shouldn’t have done that… He made me go catch the damned Kracken just so he could release it again…

P.S… Note to CW and M, the Kracken is getting fat and needs to go on a damned diet, I can’t hardly get it back in it’s cage anymore…

I actually agree with most of what you wrote. Liberal (small “l”) that I am, I’ve come to dislike the fear-mongering on the left about the evils of “big oil” and dangers to the environment. I’m not about to put my old ass on a bicycle and little vehicles terrify me. I need some metal around my family, and I’m not going to stop buying gasoline any time soon.

However, the post neglects one detail: oil is a finite resource. Whether or not it is limited by our ability to reach it or by the simple fact thatt there isn’t much left, I’ll leave to the experts. But, either way, oil is going to eventually become unavailable.

I’m thinking later is better than sooner — we’ll get our personal fusion reactors, but it ain’t gonna be anytime soon. There is a lot to be said for conservation and maybe saving a little for later isn’t a bad plan. Even if it costs a little more.

I ask those far more knowledgeable on the OIL industry than to correct anything wrong in the following…. I heard that “proven reserves” only refers to oil that we know is there due to the fact that there is a producing well there. Thus, the greenie weenies ability to get drilling blocked at damn near every turn contributes to the “we hae 2% of the worlds proven reserves, but use 20%” meme. And I read that North Americais actually the 500 pound gorilla in the room when it comes to true energy reserves.
About 20 years ago it seemed to me that we deliberately Aattempting to use the oil from those shithole countries first, preserving our own for the future. Of course, we didn’t have a stinking Marxist in chief back then either.

Well, not exactly. First, the concept of “proven reserves” is mostly a corporate, SEC-regulated thing, not a national reserves evaluation thing. In the corporate world, there are such catagories as “proven non-producing” and “proven undeveloped.” The term for regional/national resources is “reserves”, which means an estimate of the resource that can be produced economically at current prices with existing technology within existing government regulations.

I’ve come to dislike the fear-mongering on the left about the evils of “big oil” and dangers to the environment. I’m not about to put my old ass on a bicycle and little vehicles terrify me. I need some metal around my family, and I’m not going to stop buying gasoline any time soon.

That’s what the big government lefties are all about; taking away your choices as to vehicles, food, healthcare and just about everything else. The global warming hoax is the biggest, costliest scam in history and it’s all about wealth redistribution and taking away our liberty.

I’m thinking later is better than sooner — we’ll get our personal fusion reactors, but it ain’t gonna be anytime soon. There is a lot to be said for conservation and maybe saving a little for later isn’t a bad plan. Even if it costs a little more.

The amount of crude oil is literally mind boggling, however, that said, efficiency in use is always the best policy. It really is simply basic mathematics. The whole concept of crude oil being a quickly expiring commodity is based solely on the ability of certain groups to control what other people do.

Alternative energy isn’t an unworthy goal, but the way the Federal government has subsidized it is criminal.

Boondoggles galore. For an administration that decries “how the 1% operates,” the whole “Green Energy” grant and loan program was run like the biggest crony-capitalism racket of all time.

Rather than subsidize it, why not come up with a “reward system” as Newt proposed for the Moon colony, where developers would only get gov’t cash if they demonstrated that their technology worked to a predetermined degree of economic viability?

Not that we can afford to be giving out awards right now, but for arguments sake…

Also, why the backlash over natural gas drilling? It’s much cleaner, yet the environmental movement is out and out LYING about the “evils of fracing” loud and often.

I disagree on the concept of finite when it comes to oil. I had an argument with Dan Lafenberg on this very topic during the election cycle of 2008. There is plenty of oil in the ground, but for a moment, let’s stipulate to your given set of facts. Let’s pretend that at some point in the future, call it year x, we will run out of oil. This is the very reason why BP, even without the government’s intervention has been working to develop alternative sources of energy, why we still have coal, nuclear, and natural gas. The free, unfettered markets are still the best place to develop those resources and determine the time to use them. Even if what you say is true is actually true, that is still not a good reason to put our economic engine in the hands of bureaucrats, who have managed to not get anything right at any point in history.

Now, I wish to lift the suspension of my familiarity with reality. The Dr. Seuss version of our natural resources as told by his now popular story of the Lorax is just plain wrong. Every living organism on Earth produces oil in some form or another. it might not be the same exact thing as the crude that comes out of the ground and is used today, but it burns really well. Hold a match up to a potato chip some time. I could have solved the problems for those living in the Lorax Forest very easily, by just planting some more of the damned trees. Our world, lives, and economy are not zero sum endeavors.

There’s no need for the government to “reward” development of any commercial industry. The feds just gave a multi-million dollar award to a company that sells an LED “affordable” lightbulb for $ 50 a copy. This sort of thing is going to happen EVERY time you let government stick it’s ignorant, ideological fingers into the pie. Any industry that gains the economic advantage will win out with no government help or reward at all.

Even it what you say is true is actually true, that is still not a good reason to put our economic engine in the hands of bureaucrats, who have managed to not get anything right at any point in history.

I’m not sure I’m willing to concede this.

It seems to me that governments and their bureaucratic minions have done just the opposite and created an environment where BP and their ilk are able to remain profitable despite global economic distress. It isn’t as though they aren’t subsidized.

How much corporations put back into R&D is a variable, but oddly enough, drug companies and energy providers manage to remain relatively recession proof while extending life spans and improving energy efficiency. I’m not seeing how regulation has significantly hurt their bottom line, they’re pretty good at passing costs on.

Insider: Got a little insider story for you. Told you Obama was way over confident. As in head up the ass over confident. It’s freaking people out. His staff is worried about gas prices and the Middle East and the poll #s, which like I told you, are actually a lot lower than the published #s. By almost ten points. Huge difference. But Obama has been on the road so much he believes his own applause. He is waiving off the concern. The guy loves the crowds. Maybe its more than just that? Don’t know. It’s weird though. Get him for a couple days at the White House and he turns pissy. Snarly was the actual term told to me. Snarly. “Get me out of here”. That is what he tells them. So off he goes flying here and there. This crowd to that crowd. Loves it. The First Lady same thing. The two have not been under the same roof for more than a few days at a time in months now. I’m starting to think the only reason he’s running for re-election is to be able to run for re-election. The actual job he cares even less about than we thought. He likes the agenda falling in place but he hates the job. Hates the White House. Hates America.

Insider: All the ingredients are in place. Falling approval ratings. A big uptick in divisive racial talk…the GOP primary race gettin’ on, which has upped the anti-Obama rhetoric. Occupy Wall Street stuff. An aborted terrorist attack inAmerica. The president crisscrossing the country talking the same old sh-t, except playing the victim card even more than before…don’t tell me for a second some of this isn’t all being played out for a very specific possibility. If needed, they will try and pull it off. I got no doubt about it now. None.

Ulsterman: So what is it? Pull what off?

Insider: A manufactured threat against the President of theUnited States. Something easily digested by the media and the American public. Not a real threat – something totally of their own making. They will use it if they need to – got no doubt whatsoever about that. Jarrett has approved the idea…and did so a long time ago. There were whispers of it during the 2008 campaign. McCain was so god-awful it never reached a serious consideration…but the plan was discussed. If needed – they were willing to go that route. It would be the ultimate use of the race card in the history of American politics. And…it would likely work if they got away with it.

Ulsterman: They would go that far? Risk something like that?

Insider: You don’t need to ask that question. Not after what we’ve discussed this past year. Not after what I’ve told you has proven out over and over again. So stop asking the fu—ing question. You need to accept the fact…if you haven’t done so yet – you need to accept the fact these people are playing for keeps. I told you – how many times? How many times have I said it? These are not Democrats. These folks are something else entirely. And they are willing to push the country – all of us, right against the fu—ing wall. Hard. I’m pushing back. Others are too. All of this is part of that effort. A small part, but an important one.

There is a whole host of issues on which to draw battle lines with your statement. I never said that regulations hurt the big corporations. As a matter of fact, I have always argued that onerous regulation help big corporations, and hurt the smaller interests trying to introduce themselves into the market place as competition. Barack Obama and the liberals have always enjoyed the big money support of big whatever donors. This has always been true, while the national perception has been the opposite.

Next, a company’s profitability, whether it be by invitation of or in spite of government’s role in the market place, us most often a measure of the benefit that they present to their customers, those individuals buying their wares from the market place. BP makes its profits, large as they are by selling oil to many people around the world. The story here is not that BP dupes Billions into buying oil, it is that those Billions find oil so useful in their every day lives that some of the dolts among our elected leaders have now found oil either to be a basic human right, or an addiction which must for some reason be broken.

We’ll take my case, just as an example. My personal business model necessitates that I be able to travel in order to sell my advice. Sometimes that travel is measured in hundreds of miles. The ability to do that, and travel the same distance the next day is made possible by oil. I am using oil as a leverage to engage in commerce that would not be possible without it. Ultimately, will BP be hurt by regulation that forces BP to raise its prices and pass those extra expenses on to their customers? My business will suffer ultimately, either by forcing me to charge more, or face the prospect of eating less.

BP does their R and D for one reason, and one reason only. They are trying to maximize their own bottom lines, as is demanded by their shareholders. By looking out for their own self interests, they are taking care of mine, and the beauty of the free market system is that BP does not even know me.

Leonard Read is able to explain this all much more eloquently than myself.

My point was, aside from a cultural reference, that I have a certain modicum of respect for communists and marxists that at the very least acknowledge what they are, and will argue the virtues of their (horrible) philosophy.

Obama gets NO such respect, for he’s as deceptive a person that there is.

By the way, and not at all off-topic. Seems to me “Earth Hour” is upon us again. (Saturday, Mar. 31, 8:30 P.M., local time) This is an “event” wherein the green weenies are supposed to turn out all lights, especially outdoor ones, and sit in the light of a few candles and think Gaia-thoughts. By darkening their homes, they believe themselves to be making a show of solidarity with Gaia, and sending a message to “The Man” in the form of a sag in electricity demand, thereby “saving carbon from being burned.” Schoolchildren will be told to enlist their parents in this charade.

So those of us who are possessed of reason, what do we do? One option is just to ignore it, and carry on as usual. But that lets the Greenies have some satisfaction of seeing the power demand sag for Earth Hour. If only 10% of households join in Earth Hour, and 90% carry on as usual, the demand will indeed sag a little, giving them a symbolic win. And remember, the Left is all symbolism, all the time.

What we should do is this: take the opportunity to celebrate Human Achievement Hour. Turn on and operate every lamp, appliance, or toy that you have, and make a spectacle of it. If your Christmas lights are still up, turn them on! Drag some floodlamps out into the yard, and point them at the sky so they will register on satellite imagery.
Start your vehicle and idle it in the driveway. Fire up your pool heater, if you have one. Put the oven on “self-clean”. Do a load of laundry. Mow your lawn with power mower. Put some loud music on the stereo. I plan to plug my welder into the Coleman generator, fire it up, and run a few practice beads on scrap metal. Just because I can.

Sure, Human Achievement Hour will cost you a handful of dollars for the extra energy used, although not that much, really, since sooner or later you will have to do laundry and clean the oven anyway, no? But the sheer entertainment value of those few dollars will be hard to beat. Watch your Greenie neighbors’ heads explode! Not only are you mocking their religious experience, but you are negating the tangible result of their “sacrifice” by filling in the sag in power demand. Last year, several Canadian cities actually recorded an increase in power demand for Earth Hour, thanks to enthusiastic proponents of Human Achievement Hour. Cheaper entertainment is hard to find!

One can pretty much always count on the Marxist to send out their brainwashed useful idiots to make some kind of symbolic statement, even when it is their very last, ok you idiots are no longer useful, now line up against that bullet ridden wall and die like good little useful idiots, symbolic statement.

I am laughing my ass of right now. Many American households have what is known as a demand meter. How this works, electricity is billed by a rate which is determined by peak usage. A spike is measured at certain times, and electricity rates are determined by the difference during off times and peak times. So, when the hippies turn all of their shit back on at 9:30, all at once, they will be driving up the price per kilowatt hour that they pay. Their savings on their bill will be quickly eaten by their increased rates. It would not surprise me in the slightest if this entire piece of stupidity were not the brain child of PG and E.

doriangrey wrote:
coldwarrior wrote:
Alberta Oil Peon wrote:
thereby “saving carbon from being burned.”
we get out electrons spun by nuke power…no carbon footies here!
That makes you 100 times as evil as the evil natural gas electron users and 10 times as evil as the evil coal electron users…

1000 times as evil because my father was a nuke worker for 40 years.

It’s a bloody shame you and your father don’t understand how nuclear energy is going to kill mother Gaia and all life on her…

35 people per year die as a direct result of wind produced electricity. The number of deaths recorded all time for American nuclear energy remains at zero. For the sake of the children, stop wind power before it’s too late!

Mike C. wrote:
@ fultonchain:
…BP and their ilk are able to remain profitable despite global economic distress. It isn’t as though they aren’t subsidized.
Please supply an example of a subsidy to these types of companies. And please, do try and find one that is unique to O&G companies, not a deduction every business gets to take, m’kay?

Just to re-cap a few pertinent features of these “subsidies” to oil companies that Obama wants to cut.

They are all tax “breaks,” or earnings that oil companies get to keep, not money paid out from the US Treasury.

The amount of earnings not collected in taxes is about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.

A full $3.55 billion of that amount (82%) is due to the way taxes are treated for all industries or manufacturers. To change these tax laws only for oil companies would require singling them out among all industries for special mistreatment. (I’m not a lawyer, but that sounds like a bill of attainder to me, something our Constitution forbids.)

The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year — enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.

Oil companies already pay tax rates of 40-50% of income. For one company, Exxon, in one quarter of one year, that amount was over $8 billion, or almost double the so-called tax “subsidy” for all oil companies for an entire year.

great article. Also of note is this little tidbit, the oil industry pays the second highest tax rates in all of American industries. Tobacco is the prevailing number one. Any oil subsidy is in fact merely the removal of a penalty being levied for the oil company being an oil company.

“Intangible Drilling Costs” are just a catagory of non-capital business expense. There’s absolutely no difference between IDCs and your local insurance company paying a cleaning service to clean the office. The only effective difference is that when I’m costing out a well proposal (and when the well is actually drilled), everything has to be separated into tangible and intangible costs. My payment to the drilling company for the rig time is intangible (like that cleaning service.) The casing, tubing and wellhead I bought is tangible – even used, it’s worth money and considered a capital expenditure. Capital expenditures for all businesses cannot be expensed in the year of purchase, but must deducted over a period of years, the term being dependent on the expected life of the equipment. Anybody that runs even the smallest of businesses is familiar with this stuff.

great article. Also of note is this little tidbit, the oil industry pays the second highest tax rates in all of American industries. Tobacco is the prevailing number one. Any oil subsidy is in fact merely the removal of a penalty being levied for the oil company being an oil company.

You know what? I kept clicking your link expecting a new browser page to open up. I just noticed that I had about 6 PDFs lined up across the bottom of my screen. At any rate, without the deduction for the intangible drilling costs, Exxon, BP, COP, et al would probably have a tough time risking a $100million dry hole.

Before we even get there though, let’s apply a little simple math to the thought process.

How is it possible that we look at an industry which in fact pays a higher effective taxation rate than what our current tax laws say they should and declare that they in fact are receiving some sort of nefarious subsidy. The oil industry as a whole is in fact penalized, and is penalized heavily by our political leaders. The only industry which is penalized heavier is the tobacco industry.

@ Flyovercountry:
I’ve always wondered why there is such hatred for the oil companies. I could be just a tad biased, though, having earned a living from the oil patch since 1974.

Personally I believe it is because the automobile represents one of the purest expressions of personal freedom second only to the firearm. Having any automobile means, you can get up and leave pretty much anytime you want.

I think it has to do with the importance cheap affordable energy has to play in our economic success. Nothing in our arsenal of current forms of energy matches the efficiency with which oil can be brought to market. The greenies were all in favor of natural gas until it became somewhat close, and then bammo! gas became evil too. Our manufacturing base, as do all manufacturing bases depend upon cheap affordable energy. By attacking that part of the economy, the Marxists know that they can eventually cajole us all into their Utopian way of life.

Personally I believe it is because the automobile represents one of the purest expressions of personal freedom second only to the firearm. Having any automobile means, you can get up and leave pretty much anytime you want.

Great point! Exactly the kind of freedoms that are hated by the commies currently in the WH. They’re doing everything they can to take those freedoms away. Sorry bastards.

It doesn’t have quite the sting of a Russian newscaster flipping you the bird during a broadcast, but the current Leader of the Free World has to be reeling at least slightly from the latest journalistic affront from abroad.

The source of the insult was a recent episode of a Danish TV show titled Detektor that focused on empty political rhetoric. In this video from the show, host Thomas Buch-Andersen opens by noting that during a White House press availability with his own country’s prime minister in February, Barack Obama “used a metaphor from boxing to explain Denmark’s role in the world.”

The Detektor segment goes on in this vein, showing Obama using the same metaphor with heads of state from the Netherlands, Ireland, and the Philippines. Before providing similarly embarrassing clips in which Obama resorts to canned expressions of solidarity, Buch-Andersen muses aloud, “Maybe the copy key got stuck on the presidential speechwriter’s keyboard.”

fultonchain wrote:
I’ve come to dislike the fear-mongering on the left about the evils of “big oil” and dangers to the environment. I’m not about to put my old ass on a bicycle and little vehicles terrify me. I need some metal around my family, and I’m not going to stop buying gasoline any time soon.
That’s what the big government lefties are all about; taking away your choices as to vehicles, food, healthcare and just about everything else. The global warming hoax is the biggest, costliest scam in history and it’s all about wealth redistribution and taking away our liberty.

The ecofreaks want oil prices to climb so high that only RICH old people will have transportation. When they get old, they expect to continue to jet all over the world whenever and wherever they please. The rest of the oldsters will have long since put out of their misery by death panels anyway.